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Strategies & Market Trends : Value Investing
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To: Walter Bagehot who wrote (38146)6/7/2010 4:12:05 PM
From: E_K_S  Read Replies (2) of 78476
 
RE: SuperValu Inc. Common Stock (NYSE: SVU)

Increased my SVU shares by 25% with a purchase today. Stock is testing new lows on lower volume. It could be signs that the relentless shareholder has (or is) throwing in the towel on this stock.

There is chatter on the message boards that SVU may be getting ready for some layoffs at their Bristol Farm stores one of their high end chains. This has always been a very profitable chain and considered one of the crown jewels of the SVU empire (at least when times were good).

It's possible they could be packaging these store for a possible sale, probably a LBO by a private equity firm. I am not too sure if this would be a positive or a negative. I could see SVU doing some type of deal where they keep the distribution & warehouse operation support services (perhaps binding the buyer to a 10 year distribution contract) but selling the branded retail franchise to an independent operator (maybe to the employees w/ an LBO backer). This would include selling the real estate for these stores. If the Bristol Farm stores are packaged for sale in this manner, it may make a good deal for all the parties and free up a lot of cash to reduce corporate LT debt.

I will continue to build my position.

FWIW after visiting my local WalMart, they are no threat to SVU at least for the stores located here on the West Coast (ie. Lucky & Albertsons).

EKS
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